There are a few high-quality technology exchange-traded funds (ETFs) that have a record of delivering strong returns over the past few years.
Technology is an important part of life and the businesses that are within the below two ETFs continue to do well:
Betashares Nasdaq 100 ETF (ASX: NDQ)
This ETF is about investing in 100 of the largest non-financial businesses that are listed on the NASDAQ.
Diversification away from ASX shares alone is a good reason to consider this ETF. It owns many of the world’s biggest and strongest technology businesses.
It has holdings of the following huge tech companies: Apple, Microsoft, Amazon, Tesla, Facebook, Alphabet, NVIDIA, PayPal and Netflix.
Many of the above businesses are the ones that are changing how we live our lives. Phones, our entertainment, how we buy things and how many people work – the big US tech companies are heavily involved in many aspects.
The revenue, profit and returns from these tech companies keep delivering. That’s why Betashares Nasdaq 100 ETF has been one of the best ETFs over the last few years. Over the last three years it has returned an average of 24.2% per annum and over the last five years it has returned an average of 23.7% per annum. It has an annual management fee of 0.48%.
Past performance is not a guarantee of future performance, but there are some industry-leading businesses in the portfolio that aren’t just FAANG shares – Adobe, Cisco Systems, Broadcom, Texas Instruments, Costco, Qualcomm, Applied Materials, Starbucks, Advanced Micro Devices, Micron Technology, Intuitive Surgical, Zoom, ASML and Moderna. As a group, they could keep doing well.
Betashares Global Cybersecurity ETF (ASX: HACK)
This is an ETF that is focused on businesses that provide cybercrime defence systems. As more and more of the world goes digital, and increasingly onto the cloud, the importance of protecting against attacks is even more important.
The portfolio is invested in both the biggest global cybersecurity businesses as well as smaller, growing companies in the sector.
Betashares Global Cybersecurity ETF is invested in 40 names, with the largest 10 positions each having a weighting of over 3%. Those names include: Cisco Systems, Accenture, Splunk, Crowdstrike, Zscaler, F5 Networks, Fortinet, Akamai Technologies, Juniper Networks and Leidos.
Most of this ETF is listed in the US, with almost 90% of the weighting. The only other countries that have allocations of more than 3% are the UK and Israel.
This ETF has a slightly more expensive cost, with an annual management fee of 0.67%. Since inception in August 2016, it has made net returns of an average of 19.2% per annum.
BetaShares disclosed that worldwide spending on cybersecurity is predicted to be around US$250 billion by 2023 and US$224 billion in 2022.
The ETF provider also reminded investors that there are very few cybersecurity businesses on the ASX and the entire technology sector only makes up a small part of the ASX share market.